VS Beauty Looks to Build Brands

NEW YORK — Victoria’s Secret Beauty, a division of Limited Brands Inc., is refocusing its energies in a bid to accelerate growth.

The beauty division of the lingerie brand has mapped out a program to accelerate product innovation and spur penetration, especially of nonfragrance categories, by leaving the duties of day-to-day store operation to the apparel staff.

This will free up resources to allow a more aggressive development of the beauty brands, according to executives. It also will result in a more unified, consistent approach to in-store operation.

The company does not break out projections, but industry sources indicate the new plan calls for a doubling of sales within three to five years, similar to what happened in the last five years. Sales of Victoria’s Secret Beauty are estimated by sources to be at $850 million for last year. That compares with $450 million five years ago.

Victoria’s Secret merchandises beauty in 1,000 stores. Of these, 500 are classified as side-by-side and stand-alone stores, with the number of freestanding units amounting to only 75. This group also includes large apparel flagships, like the door on 34th Street in New York, which contains a large beauty department. The remaining 500 stores are lingerie units containing limited niche fragrance presentations.

“The rationale is to have one face of the brand for the customer; it’s all about Victoria’s Secret, the megabrand,” said Sherry Baker, who as president co-manages Victoria’s Secret Beauty with Jill Granoff, chief operating officer. Baker said the motive is to “optimize the consumer experience” by integrating the merchandising of lingerie and beauty into one seamless vision.

Once the beauty staff is freed of the need to manage stores, there will be more resources to concentrate on merchandise content, which, theoretically, can lead to an “acceleration of innovation and increase the speed to market” with a stream of new products.

Previously, beauty personnel ran those stores while the fashion staff oversaw the lingerie units. Now, the apparel division will run all the stores, with strong input from the beauty staff.

This story first appeared in the February 24, 2005 issue of WWD. Subscribe Today.

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Granoff noted that by putting store operations into the hands of a single organization, the beauty staff will be free to try to reach more of the consumers who already patronize the Victoria’s Secret lingerie brand. “We estimate up to two thirds of our lingerie customers do not currently use our beauty products — this represents a tremendous opportunity to grow, simply by better penetrating our current customer base,” she said.

How the reorganization will work is that Kim Draper, who was senior vice president of stores for Victoria’s Secret Beauty, will now be senior vice president of retail management for the beauty division. She will work on developing beauty merchandising concepts. Draper, who reports to Baker on the beauty side, will consult with Jill Dean, executive vice president of the top 160 malls on the apparel side, who also is  general manager of beauty for Victoria’s Secret Stores. Overall supervision will come from Chris Lanning, who was executive vice president of stores for the fashion group and is now in charge of all 1,000 units.

Industry sources estimate that 80 to 85 percent of the beauty volume is generated by fragrance and fragranced body care. The plan is to get that percentage down to 60 by increasing the percentage of skin care, body care and color cosmetics.

After retreating in its attempt to sell the new Aura Science line in its own freestanding stores, skin care has  achieved increased penetration, with Aura Science being carried in only 350 Victoria’s Secret stores. Color cosmetics are in 500 doors and a new body care line is being tested.

In addition to developing its own brands, Victoria’s Secret also is carrying third-party brands in alliances with names such as Pout and Madina Milano. — Pete Born

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PARIS — Chanel posted 7.2 percent growth in its sell-through beauty business in France last year, according to a statement from the company. In the period, the domestic beauty market grew by 4.7 percent. Chanel said its stake in the French beauty market hit 8.3 percent in 2004. Five-year-old Chanel Precision ranked in the top 10 of France’s selective facial care category, with 3.1 percent of the market. Sales of Chanel Precision rose 30.2 percent last year, the company said. — Ena Yasuhara

The Face-Friendly Skies

PARIS — Air France is getting increasingly beauty-conscious. Before the company’s flight attendants sport their new uniforms, which were designed by Christian Lacroix, they’ll get beauty tips from Shu Uemura. Through mid-March, three of the L’Oréal-owned beauty brand’s makeup artists will be on hand to advise and make over Air France flight attendants individually or in groups of 10, the companies said jointly in a statement. Up to 3,500 women will be involved in the Paris-based program. “Air hostesses, who work under an artificial light with air conditioning that has a tendency to dehydrate the skin, have specific needs in terms of makeup,” the companies stated. — E.Y.